A long while back, we blogged about the Legal Tender Act of 2011. This legislation passed in the state of Utah and allowed the use of precious metal coins, valued at their “intrinsic” worth and not their “face” value (bullion coins are traditionally printed with an arbitrary face value, which is often much less than the value of the metal contained in the coin). It was expected that the state would see a rise in use of the American Eagle Silver dollar.
A similar bill has recently passed in Missouri, called the Missouri Sound Money Act of 2012. This bill goes a step further than the Legal Tender Act and actually declares base gold and silver (as opposed to bullion coins) as legal tender alongside normal US currency. In a way, this is like returning the state of Missouri to an economy based on the gold standard – or at least, giving citizens a choice of currency.
Missouri is not the only state to dabble with such a bill. South Carolina has also voted on a similar bill. It’s interesting such bills are gaining in popularity across the US. If it becomes widespread, the effects on the gold market could be very interesting. We at Manhattan Gold & Silver will be keeping our eyes on the issue.